According to a recent member survey and report from Associated Builders and Contractors, its Construction Backlog Indicator rose to 7.5 months in January 2021, an increase of 0.2 months from its December 2020 reading (see Table below). Despite the monthly uptick, backlog is 0.9 months lower than in January 2020.
“Though nonresidential construction spending has continued to recede for the better part of a year, the growing consensus is that the next six months will be a period of improvement,” said ABC Chief Economist Anirban Basu in the press release. “While backlog is down substantially from its January 2020 level and profit margins remain under pressure, more than half of contractors expect sales to rise over the next six months and nearly half expect to increase staffing levels.”
According to Basu, anticipation is that the second half of the year will be spectacular for the U.S. economy from a growth perspective; however, that’s not the whole story. “There are also public health and supply chain considerations. During the COVID-19 pandemic, many contractors experienced repeated interruptions in project work,” he said. “Acquiring key materials and equipment has also become more difficult, with occasional price shocks for certain commodities. With vaccinations proceeding apace, many contractors will benefit from fewer interruptions going forward and the restart of many postponed projects.”
Watch the video from Basu on what the organization’s latest survey data will mean for the construction industry.
